Where does the money go?

There have been a few questions over the course of the campaign regarding our goal amount and funding in general, I think the answers might be interesting to people so I thought it deserved an update.

There's a saying that goes; “You can have it fast, cheap, or good. Pick only two.” The implications of this statement are painfully true.

To address the 'why so much money?' question succinctly, I could say 'because that’s how much it costs'. While accurate, that isn't a very good answer. It’s actually kind of interesting looking at that question from a bird’s eye view. On our end we view this cost as unprecedentedly low for a game such as this, while some view it as unreasonably high. Whether or not a fledgling studio can actually garner that kind of money through a system such as Kickstarter is a different question, which each project answers on its own in due course.

How do you determine your goal amount? People determine cost in many different ways and it depends, not only on how you look at the crowd funding model, but your particular monetary situation as well. Some people or companies look at crowd funding as an end-to-end risk mitigation technique. They may be able to afford to create a game partially or entirely on past earnings, but turn to crowd funding in order to reduce or completely remove their own direct risk. It allows them to take on tasks which aren't generally viewed as viable by others or even themselves.

Some others use it as a partial funding or as a kick off to their funding search. It’s another way to mitigate risk; investors are more likely to jump on the wagon after it has been partially secured by crowd funds.

It is suggested by some analysts that asking for less than you need and hoping you far exceed your stated goal is the way to go. This approach is the most risky and I feel quite unfair to those who trust you with their money. There is always the possibility of just barely meeting your goal. If that happens, you are in the distasteful position of not being able to follow through on your promises to your backers.

Still others use this system as direct funding and do not intend to seek further funding outside of the goal they set here on Kickstarter. It's these projects that either tend to be smaller, or as in our case, more expensive. They seem more expensive because you are seeing what it actually costs to make a game like this through crowd funding. People outside of the game industry, and even sometimes inside the industry, no doubt raise an eyebrow at these cost figures; at a glance they can seem quite excessive. Especially when considering them against some of the other approaches described above.

Doubt over the cost accuracy is different than doubt over the ability to garner the funds through crowd sourcing. I am addressing the former. The latter in the end, is immaterial. If something truly costs a certain amount to make, then that is how much it costs. There is no use in saying it should be cheaper instead.

So what do things cost? Well let’s imagine you are making a game similar to Blackspace. You have a budget determined. You know end-to-end what the game will cost to make. Is that the figure you set as your goal? There have been stories on Gamasutra and elsewhere that describe the perils of this approach. The first thing to recognize is that the goal price isn't the game development cost. It is the game cost plus the cost of raising money in this 'Kickstarter' fashion.

Say you planned ahead and set your goal to be 350k. Kickstarter and Amazon take 10% if the project succeeds as a service fee. This reduces your 350k to 315K.

Since Kickstarter funding is not considered a liability, it is generously taxed. You can now remove an additional ~30% of what is left. This brings you to about $220K.

Now, though we love our backers dearly, there are the costs associated to having backers as well, especially in physical goods. Not every dollar for each pledge level goes directly to funding the game, most of the extras are not free. Pretty much the only level that goes 100% to game funding is the purchase of the game only. The rest, physical or not, has a cost. It is either a creation time cost (which translates to money) or direct monetary cost. This cost can be roughly calculated up front as well and typically constitutes about ~5% per tier if you average across all tiers. It is your responsibility to make sure that those who contribute to higher tiers do indeed help the game even further along to its goal, since normally that is the intention of the more generous backers aside from getting cool stuff.

All this leaves you with 203k to create your game. Woo hoo! 203k to shower yourself with while you work! Not so fast. Now assuming you don’t have a adequately sized team of people willing to work simply for food, you have to hire people. The other option is to do all the work yourself, but if you’re making a game like Blackspace with two people, it will take you an unacceptably long period of time and the costs compound as tech ages. Here come our two choices again; fast, good, or cheap.

So, on to hiring! Who do you hire? Well for starters you will need content creators. This can mean artists, designers, and musicians/sound designers among others. You have to make lots of 3d models, textures, physics models, particle effects, upgrades and load outs, environments etc. You need to build levels, make data driven scenarios, create story driven events and refine procedural parameters. There’s music, sound effects and story. You'll need menus, a compelling front end UI, an informative in-game UI and detailed end game statistics. Speaking of stats collection, there’s server communication and maintenance as well. The list goes on.

Programming is needed as well. Luckily in your case, since your project is so similar to Blackspace, you spent the last 9 months intensively creating systems that will handle the content and have created many of the main game systems. Now you can focus on the remaining, smaller, but plentiful and diverse, systems that make a game complete. For that you will need a bit of programming help.

To keep it simple; let’s say all you really need is roughly 5 people, for the next 8-9 months, artists, programmers etc. Keep in mind, developer’s jobs aren't over the day the game ships. For an idea of what it costs to hire game industry professionals I would direct you Gamasutra’s 2011 Game Industry Salary Survey Results. None of this accounts for marketing, server fees, licensing, and many of the other costs associated with making a game.

All in all making games is a pretty pricey and risky business, even more so if it’s in any way different or new. The question of whether or not you will be able to raise the money you need is based on many things: How ambitious is your game? How revolutionary? Who are you? Is your timing right? Is your pitch right? Is the game type popular? Is the game type’s market saturated? Do you have the money to market it? How many people do you already have in your corner? Have you given yourself the amount of time you need to raise your money? This list could continue for quite a while.

We have received tons of feedback on this campaign throughout this time. We've been told that we have among the strongest most complete and well-polished pitches. We've been told that we don’t have enough to show and we need to polish our work more. We've been told we are asking for ridiculously too much money. We've been asked how we can make a game like this with so little money. Whether they approve or disapprove of our approach, it’s really interesting seeing this journey through the eyes of so many different people.

Hopefully this sheds a bit of light on costs and the less than obvious expenses that are all part of a project like Blackspace.

Though the Kickstarter isn’t over, I have looked back over this campaign. The one thing I would change is to spend even more time building a community outside Kickstarter. I am gratified that we found backers with the foresight to see the value in Blackspace. It may simply be that Kickstarter is not a viable platform for us. If we find that this attempt fails there are other options for us, one of which is to find some funding and try again, we don’t plan to abandon this game. We can see from platforms like this and Steam, that there is a real interest in this game. It may however take a good deal longer to bring to you through other means. Regardless of the outcome, be sure to keep up with us on www.pixelfoundrygames.com.

Thanks for all your support and encouragement, no matter what happens with the campaign, it has been an enjoyable and enlightening experience for us.

Comments

I really like backing projects where the creators have really informative write ups and actually inform the backers exactly how and why they are doing certain things. The concept of crowd sourcing necessitates a closer relationship between the consumer and the creators, and I think that this project has done great strides towards achieving that.

Thank you so very much for this update. The back-end information (especially that Amazon takes a cut on top of Kickstarter and that the revenue brought in counts as profits of some kind and thus gets taxed at the applicable corporate tax rate) is invaluable. If this project doesn't work out on Kickstarter, you should really make sure your last update gives people a way to sign up for a Pixel Foundry newsletter or something.

Most apparently the game has to start on P to succeed. Like you know, the mentioned Project Eternity and Planetary Annihilation. So, just reboot the campaign as Pitch Black Space... whoa? Isn't that awesome? :O

Please for the love of * and good, unique, innovative sci-fi, please please please make this game.

I'm sure the big issue was a lack of pre-kickstarter advertising/community building, along with unfortunate timing of launching right in-between several other major and better covered (by the media/industry) projects like Project Eternity and Planetary Annihilation. Otherwise, I'm sure this could be a great game that I sincerely wish I could pledge more to, and I hope you will find a way to make it anyway.

Keep my email/contact info if you get it, consider this my permission to mail me and let me know what you do from here if the project doesn't get funded. If my small, humble indie studio can help, let me know that as well.

Maybe releasing an alpha version of the game with pre-orders might be a viable solution. If you market it correctly you'd likely be able to get the kickstarter backers to do it (Replicate the rewards of kickstarter on your own?) We would get something to play around with so we can provide feedback/show friends and you would have a chance at 100K (more or less).

Thanks for this update, really interesting. Add me in the "I can't believe you can make a game for only that budget" camp. I work in IT management and what you have left (200k) is about what we'd need to develop a timesheet for our employees and even then, we'd probably run short halfway through if there's a problem during development. So yeah, kudos for making a game that looks this big with a budget this low. I hope you guys still make it.

I'm with William, I think the timing didn't help. To be fair, I'm not sure if Kickstarter will be viable for much longer for game developers considering how many projects most of us backed already, and getting enough media attention to drag new people to Kickstarter will require quite a lot of effort. I think I'm at 40-45 games backed here (with maybe $40 average backed), so that's close to $2k without a single game received yet, and some not coming out until 2014 (if they ever do). That's not counting the $300 I spent on OUYA among other projects. It makes it harder for me (and I bet for most people here) to pledge enough for projects like this (I think I'm at $35 here), while 6+ months ago I would've gladly gave $100 without even watching the whole project video.

Anyway, I know it doesn't help you much but I'll try to think of better solutions for you guys. The biggest thing for me is when a project I backed back or advertise another one. I think that's why I came here actually. To be honest I haven't really checked all you had to offer but blind-pledged because of a recommendation (if devs I believe in believe in you...count me in). Maybe focus on backing projects and hope they'll give you a shout out if you relaunch?

It's a shame it might be backed. Its an original and cool concept and you guys definitely got coverage from some of the major outlets. As a developer, I know it costs a lot of money to develop software (and games are just that), and I don't see your goal as unreasonable. Keep up the great work and I hope to see this game see the light of day and grace my steam game list with its name.

It's not over yet, most kickstarters I've been tracking (that weren't the aforementioned big names in video games) get a lot of funding in their final days, sometimes into the final hours. $125k may be unthinkable, but if you (and we) can garner enough attention for this title, it may happen. A bit over 6000 people need to pledge the $20 amount. That's it! For every person who pledges more, that's the worth of 2-500 people.

But if it doesn't work out, I'll keep my eye open for a follow up kickstarter next year. There's no shame in putting projects aside to pay the bills for a little while, especially if it means paying the bills for the project you want to do.

Since I first saw the video, I was amazed that Blackspace looked as good as it does through the work of only a few people. I think you've asked for a remarkably modest amount for a game as ambitious as Blackspace, and I hope that, if this Kickstarter fails, you won't get discouraged. Please take the interest shown here to heart, and know that there are a lot of people who are hoping Blackspace sees its realization!

This update was so informative. I've often wondered how exactly those behind-the-scenes costs add up and it's great to see them laid out so openly. Not surprisingly, I agree completely with your approach to this Kickstarter and philosophy moving forward. You've got a decent following as a result of this effort; perhaps the answer is to build on that, get the word out, and then make another attempt in a month or two. Hopefully not too long, because I'm eager to see you funded sooner rather than later. ;)

I think it was unfortuante but the timing was the real downfall of this project. This came after/during several extremely popular kickstarters - Planetary Annihilation, Project Eternity, Castle Story (to name just three). Kickstarter funding seems to be cyclical - a few games get lots of money, and less people then fund other deserving games for a while as they have spent maybe $100 on a few big projects. The same for higher rewards - people putting a lot of money into one game can't do so for every game...

I'd say you should leave it a little while, maybe get a bit more done if you can find the money to do it for a few months, then try again with a new kickstarter!

(and the video - make it a trailer/gameply at the beginning to attract attention and grab viewers, then talk about the game after that, to explain why what they just saw is worth their money). There is no problem having a long video, as people who just want to see the visuals can be given that at the beginning...

I think your goal is very reasonable. Coding is hard work, and game design take a ton of man hours. I think some people forget that you can't just sit and make a great looking video game as a hobby, you still have to put dinner on the table, and gas in your car. I am a film maker, and often see requests for crew help that say "no pay but credit on the dvd" and I think "yea, credit is great, but it wont pay the electric bill" So I get where you are coming from.

I love the concept of this game and hope you will work to grow the community outside of kickstarter, and after a while (maybe 6 months max, don't want to loose momentum) try again. I am pretty sure you can still send updates after unsuccessful projects so you can keep us all informed along the way and let us know when the new KS page is up and running.

As far as growing the community, is it possible to make a pre-beta version of one level that can be released for feedback? Just a basic level, would not even need rendering on the robots, attack of the cubes works for a pre-beta, but it would let people see the game mechanics and may help get the word out. I don't know how much more coding would need done from what you already have, but maybe it will be easy and help you out.

I did not think there was anything wrong with your video, but I think others may be more likely to watch a short 'action filled' version. with all the other info in another video below.

anyway I really hope you can make this happen, because I plan to waste a ton of hours playing Blackspace!

This was an excellent post. Most of this information is already out there in one way or another, but I think many people are blissfully unaware of things that go on behind the scenes such as companies using Kickstarter to mitigate their costs. It's also been well documented that the more concrete a project is, the less funding it generally receives. A lot more money is thrown at 'what could be' than 'what is', a prospect which boggles my mind.

This was a very informative post! I do think that this project it awesome, but if I go back to my initial reaction to your promo video, it was "Sheesh, this seems hard to control!" Then I read some of the comments and answers and understood more how it worked, like toggling for thrust. I imagine many people do not spend the extra effort and look around for answers though. No matter what happens I want to support this game as it appeals to me on many levels :)

@Archon: Agree with you 100%. I purely believe that Black space hasn't reached its goal because it wasn't able to get enough coverage media wise. Its a great game based on what i've seen so far, and $350,000 is avery respectable goal in my opinion.

@PixelFoundary: Really appreciated the breakdown of costs to make a game
Hope all the complainers who think 350k is too much realize that $15 or $20 is too little for this game. And considering you guys have already pumped 9 months into this project, I really hope you giys can get funding somwhow, through kickstarter or other means.

Of course everyone have an opinion on this and no one can know for sure.
I would guess a bad timing because, to be honest, I don't see any other reason this project may not succeed.
Still there's now almost 4,000 more people interested by Blackspace than before this Kickstarter. Let's build on this.

So... Since the only tier that goes 100% towards the Project is the game only (let's say the $20 one), that means that you were hoping for 17,500 backers? If you look at expecting the higher ones to get Backed, that still leaves you over 10,000, I would suspect.

well put. Its simple. only the one making something knows what its going to cost. know this from first hand experience with my own business. sometimes people cant believe how expensive your stuff is - other times they pay you extra because they think its way too cheap. find the propper price and stick with it.

Thanks for sharing this insightful information with us. I knew some of the costs but I had no idea you had to reduce 30% of your money to taxes. Ouch! I hope you keep us (the backers) in the loop if you manage to find funding somewhere else and let us help out if it's possible. otherwise I wish you good luck in your future endeavors if this kickstarteR ends badly. Thank you for everything :)